Grab ordered to pay US$200,000 in compensation to Vietnam’s Vinasun

The People’s Court of Ho Chi Minh City on December 28 ordered ride-hailing firm Grab to pay VND4.8 billion (US$206,985) in compensation to Vinasun, a local taxi operator, local media reported.  

Illustrative photo.

Vinasun filed a lawsuit against Grab 18 months ago, accusing the latter of unfair business practices that had cost it US$1.76 million in lost profits. 



The court’s verdict said that Grab has violated Vietnamese regulations, namely Decision No.24, which pilots the application of technology in managing and connecting electronic contract-based passenger, transportation, as it operates as a taxi company, and not just as a technology firm. 



The verdict also added that there was a cause-effect link between the operation of Grab and Vinasun’s lost revenue, but said Grab was not the only factor behind those losses. 



In a statement published after the hearing, Grab said it would appeal and seek a reversal of the court’s decision.



“We are prepared to sue Vinasun for defamation, and all other parties that have colluded with Vinasun if there is no retraction of the groundless allegations made towards Grab,” the statement said.



Grab added that the verdict would set a bad precedent for other traditional companies and inadvertently encourages them to take the easy way and maintain the status quo by suing their competitors instead of constantly innovating through technology to remain relevant and competitive.



It signals that companies no longer need to be innovative when they are outperformed by their competitors and also contradicts the Vietnamese government’s pursuit of its Industry 4.0 and digital economy ambitions, it added. 



Grab and Uber arrived in Vietnam in 2014 and operate both car and motorbike hailing services. The two services started to run on a trial basis in early 2016, but have been caught up in a turf war with traditional taxi drivers, as the rise of these two firms have led traditional taxi firms on the downhill path.



Grab on March 26 confirmed its acquisition of Uber’s Southeast Asia operation for an undisclosed sum, raising concern over its alleged monopoly status in the region’s ride-hailing market. 



The Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade on December 12 said in a statement that Grab’s acquisition of Uber’s Southeast Asia operation, including Vietnam’s market, has infringed competition law. 



The case would be referred to the Vietnam Competition Council (VCC) for further handling in accordance with the law on competition.